Browsing by Author "Kalumbu, Sakaria A."

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    An investigation of the relationship between private consumption expenditure and lending rate in Namibia
    (2014) Kalumbu, Sakaria A.
    The study examines the relationship between private consumption expenditure and lending rate in Namibia, with the aim of highlighting the effect of lending rate as an important factor that determine the private consumption expenditure growth. The study is based on annual data covering the period from 1980 to 2011. The Unrestricted Vector Auto – regression Model (VECM) procedure was adopted. Two proxies for real wealth and real disposable income are used in the study. The results show that real private consumption expenditure in Namibia adjusts fast to changes in nominal lending rate, real wealth and real disposable income and that the effects wear off in the long run. The results also reveals that the real private consumption expenditure in Namibia is significantly explained by the changes in lending rate, income and wealth and the effects confirms with the theories of consumption. Real wealth and real disposable income have a positive impact on real private consumption expenditure, while nominal lending rate has a negative impact. The negative impact realized from the findings shows that in Namibia, the relationship between private consumption expenditure and lending rate depends on the magnitude of the substitution effect. A fall in lending rate by the commercial banks will be an appropriate instrument for stimulating the levels of private consumption expenditure in Namibia. With income and wealth playing a vital role in influencing consumption levels of households, fiscal policies, through its impact on disposable income and wealth, should be considered as effective tools in promoting private consumption expenditure.
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    Is there a casual relationship between lending interest rate and credit availability to households in Namibia?
    (2015) Kalumbu, Sakaria A.; Nyambe, Jacob M.
    This study purposed to answer the question of whether or not there exist a causal relationship between the lending interest rate and credit volume available to households in Namibia. Analytical methods of unit root, Johansen cointegration, Granger-causality and the impulse response function were all used for estimation. The study period is the year 2000 to 2012 using panel data. Lending rate and credit stock available proved to be significant but with an inexistence of a long-run relationship between them. There is a one directional causal relationship between lending interest rate and credit available to households in Namibia which runs from credit availability to lending interest rate. Having also found a positive relationship between credit availability and lending interest rate in Namibia, lending rate should be sustained at a slightly higher level in order for the economy to keep prices stable.